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Crop Selloff · Professional Ag Marketing Podcast

• 0:01
  SPEAKER_00: Welcome to the Professional Ag Marketing Podcast.
• 0:04
  SPEAKER_00: If you want a deep dive into the ag markets and risk management strategies, your search is over.
• 0:10
  SPEAKER_00: Come here after every Friday to get your weekly commodity recap.
• 0:14
  SPEAKER_00: Trading commodity futures and options involves substantial risk of loss and is not suitable for all investors.
• 0:21
  SPEAKER_00: This is your host, Mike Minor.
• 0:22
  SPEAKER_00: Let's get started.
• 0:24
  SPEAKER_00: Today is April 30th.
• 0:26
  SPEAKER_00: I am flying here solo today at ProAg, wanted to do a special uh podcast today, just talking a little bit about the market movement here over the past couple days.
• 0:36
  SPEAKER_00: The corn market in particular here, we had a big day yesterday.
• 0:40
  SPEAKER_00: It was a first notice day today on the May contract, and yesterday we saw a little bit of a washout right ahead of that.
• 0:48
  SPEAKER_00: We were down about 15 cents on the May corn yesterday.
• 0:51
  SPEAKER_00: July corn as well sold off pretty hard, down about 13 cents.
• 0:56
  SPEAKER_00: However, once you go out to that December time frame, it was only down about six cents.
• 1:01
  SPEAKER_00: So it was a lot of weakness right up front.
• 1:03
  SPEAKER_00: Now, with that weakness yesterday, a lot of us were expecting to see some sort of major headline coming across really being a catalyst for the sell-off, but it uh we really failed to find any major uh reasons for that sell-off.
• 1:18
  SPEAKER_00: So when I was viewing kind of the activity with uh with the sell-off there yesterday, a few main reasons probably contributed to that sell-off.
• 1:28
  SPEAKER_00: One has been planning progress.
• 1:30
  SPEAKER_00: Planning progress has been ahead of pace.
• 1:33
  SPEAKER_00: Uh if Monday's afternoon report suggested that the United States was 18% planted on soybeans, well ahead of the average of only 12%, along with 24% ahead of the 22% average.
• 1:47
  SPEAKER_00: So that was pretty far compared to expected there.
• 1:52
  SPEAKER_00: And uh more than that, expected on the forecast, it looks like a very nice planning window for most of the United States, in particular the Eastern Corn Belt here, over about the next week.
• 2:03
  SPEAKER_00: So with that being the case, great planning progress should continue to take place here going forward.
• 2:09
  SPEAKER_00: The other part of this has been uh South America weather being uh being somewhat ideal as well.
• 2:16
  SPEAKER_00: Uh so that has had an impact.
• 2:18
  SPEAKER_00: And then also yesterday, uh more trade talks with China that uh China continues to play uh more of a role where they say not a whole lot of talks are occurring.
• 2:30
  SPEAKER_00: They want a rollback on tariffs before they really chat with you know with the United States on trade.
• 2:36
  SPEAKER_00: So a little bit of bearishness there as well.
• 2:38
  SPEAKER_00: So yesterday was a little bit of a risk-off day.
• 2:41
  SPEAKER_00: The closer we get to knowing that this crop is in the ground, growing well, off to a really good start, the less weather premium that can be uh used in in this trade.
• 2:52
  SPEAKER_00: So it does look like maybe 30,000 contracts or so of managed money maybe slipped out yesterday.
• 2:58
  SPEAKER_00: So that's part of it uh for sure on the uh sell-off that we saw occur in those grain markets yesterday, especially ahead of first notice day there too.
• 3:06
  SPEAKER_00: Uh you've got a May Wazday report coming up that with the planning progress and weather we've had so far, it likely suggests that that yield probably shouldn't be moving uh going into this, uh going into uh this May Wazday report, not this next Monday, uh, but but the one after it anyways.
• 3:26
  SPEAKER_00: So a little bit of activity there in that uh corn and soybean market yesterday.
• 3:31
  SPEAKER_00: Trying to get a little bit of that built back today in the corn market.
• 3:35
  SPEAKER_00: Soybeans also uh still finding a little bit of uh resistance here in today's trade.
• 3:41
  SPEAKER_00: The other thing I want to talk about was the spread action that is going on.
• 3:45
  SPEAKER_00: It looks like this corn crop, for example, is going in at a pretty decent rate, giving us uh many acres, it looks like, uh very highly anticipated acres of 95, 96 million acres or above.
• 3:58
  SPEAKER_00: And when I look at the spread action, this December corn to about March or July corn going forward into 25 and 26, the market based on the spreads looks like they're expecting a big crop this harvest.
• 4:12
  SPEAKER_00: And the spreads have really shown us that here recently.
• 4:15
  SPEAKER_00: December 25 corn is now 29 cents lower than what the July corn of 2026 is showing.
• 4:22
  SPEAKER_00: So that that spread was about 20 cents here back uh about only a week ago.
• 4:30
  SPEAKER_00: So that weakening by 9 cents has really uh shown us that over the past week or so, that increased planning progress, great anticipated progress going forward, gives us a decent shot to raise a nice crop.
• 4:44
  SPEAKER_00: So the the spreads are a little bit more bearish potentially than what the futures markets maybe told us here in the recent uh recent days, anyways.
• 4:53
  SPEAKER_00: Keep an eye on those spreads.
• 4:55
  SPEAKER_00: Uh it sounds like uh a lot of years that spread can kind of lead the way for market direction.
• 5:01
  SPEAKER_00: And uh something we should keep an eye on.
• 5:03
  SPEAKER_00: Uh full carry has been somewhat difficult to establish here the last couple of years because of the increased interest rates and storage fees as well.
• 5:12
  SPEAKER_00: So something to keep an eye on there in these grain markets would be spreads, and then this May Wazday report coming up, anyways.
• 5:20
  SPEAKER_00: But it does look like yesterday we did uh did have a little bit of weather premium leave this marketplace at least.
• 5:27
  SPEAKER_00: But that I wanted to get that special report out today.
• 5:30
  SPEAKER_00: We're seeing a lot of uh interesting activity on the outside markets as well.
• 5:34
  SPEAKER_00: The SP 500's been all over the board today, which we know contributes to a large portion of managed money, funds that can potentially come into other markets like corn and impact our businesses.
• 5:45
  SPEAKER_00: But the the last 24 hours we've got a better glimpse of earnings and how the American economy could be feeling.
• 5:52
  SPEAKER_00: And it one of the things we are seeing is that the American economy has probably contracted a little bit more than anticipated.
• 5:59
  SPEAKER_00: And the SP 500 is sold off because of that in the last day or so.
• 6:04
  SPEAKER_00: And then also we did see just a slight uptick in increased buying consumer-wise, at least ahead of any tariff announcements that could be coming.
• 6:15
  SPEAKER_00: So uh kind of front loading on buying from the US consumer, but nonetheless, it does look like uh spending and contraction is starting to occur in the US economy.
• 6:26
  SPEAKER_00: That's what I got for you today.
• 6:27
  SPEAKER_00: Thank you for the quick update.
• 6:29
  SPEAKER_00: If you want more podcasts like these in the future, please let us know.
• 6:32
  SPEAKER_00: And thank you to all our listeners.
• 6:34
  SPEAKER_00: Please reach out to us at professionaleggmarketing.com.
• 6:38
  SPEAKER_00: Check out our other podcast as well, Professional Egg Marketing, that's released every Friday.
• 6:43
  SPEAKER_00: Trading commodity futures and options involves substantial risk of loss and is not suitable for all investors.
• 6:49
  SPEAKER_00: See you next time.